A PAYMENT SCHEDULE NEED ONLY BE PREPARED IF THE RESPONDENT DOES NOT INTEND TO PAY THE FULL AMOUNT OF A PAYMENT CLAIM UNDER THE ACT BY THE DUE DATE. IGNORING A PAYMENT CLAIM WITHOUT AN INTENTION TO PAY IN FULL BY THE DUE DATE MAY HAVE SERIOUS CONSEQUENCES.
Who is a Respondent?
A respondent is a person who has received a valid payment claim and is liable, or may be liable, to make a payment under a construction contract [section 17(1)] or for related goods or services.
A respondent is also party to a contract:
- in which construction work or related goods or services is being provided in Queensland; and
- which does not relate to a residence in which the respondent lives or proposes to live (a resident-owner under the Domestic Building Contracts Act 2000).
Important qualification: If a contract includes work other than on the respondent’s residence, then that work is subject to the Act. The Act applies to contracts involving residential investment properties, landlords, strata title bodies corporate, developers, builders, contractors, sub-contractors, consultants and suppliers. The definition of resident-owner under the Domestic Building Contracts Act 2000 excludes a person who holds (or should hold) an owner-builder's permit under the Queensland Building Services Authority Act 1991. Therefore an owner-builder qualifies as a respondent and may be served with a payment claim.
What is a payment schedule?
A payment schedule is the notice in writing which must be served on a claimant if the respondent does not intend to pay the full amount of a payment claim under the Act by the due date for payment. This is regardless of whether the respondent believes that the claimant is or is not entitled to make the claim.
The due date for payment is the date on which a progress claim becomes due and payable. If the contract is silent then it is 10 business days after the payment claim is made [section 15(1)]. However the contract may provide for a shorter period than 10 business days. A contract provision seeking to extend the period beyond 10 business days is void.
A payment schedule must: 
- Be in writing and addressed to the claimant;
- Identify the payment claim to which it relates;
- State the scheduled amount of payment that it is proposed to make (it may be “nil”);
- If the amount that the respondent proposes to pay is less than the amount claimed in the payment claim, the respondnt should set out:
- The amount (if any) that the respondent agrees to pay - the “scheduled amount”;
- The amount that the respondent does not agree to pay under the payment claim;
- Detailed reasons in the attachment(s) as to why the respondent intends not paying any amount with respect to the payment claim;
- Detailed reasons in the attachment(s) as to why the respondent intends withholding any amount with respect to the payment claim including how the valuation of the withheld amount has been calculated.
- If that amount is less than the amount claimed, state all the reasons why. The Act precludes the adjudicator from considering issues not included in the payment schedule. Certain reasons for refusing to pay are void under the Act, including "pay if paid" and "pay when paid".
The payment schedule is not served until it is delivered in person to the claimant or lodged during normal business hours at the claimant's ordinary place of business or posted or faxed to the claimants ordinary place of business (or as otherwise provided by the contract), so that it reaches the claimant no later than 10 business days after receipt of the payment claim. The contract or common practice may provide for other methods of service, such as email.
We recommend that a record of the time, date and manner of service on the claimant be kept. A claimant may deny receipt of the payment schedule or claim receipt after the expiry of 10 business days (or such shorter period provided by contract). In this case, the respondent must be able to evidence the date of service.
In the absence of any contract provision, we suggest that service of the payment schedule be performed in one of the following ways with the preferred option being personal delivery by courier who requires a signature.
- Courier - signature required
- Registered mail - signature required
- Fax - Print and keep full page fax journal report as evidence of transmittal
- Email (only to an email address which has a history of usage between the parties) - In email options, tick both "request a delivery receipt" and "request a read receipt".
What contract provisions are void by the Act?
Void contract provisions include:
- Any provisions that are inconsistent with the Act;
- “Pay if paid” and “pay when paid” clauses, even if they are included in the contract;
- Clauses that attempt to “contract out” of the Act;
- Clauses aimed to deter a person from taking action under the Act; and
- Any provision which would limit interest on late progress payments to an amount less than the rate of interest on judgments of the Supreme Court.
Please move to the next step on the "Payment Schedule NOT served flowchart". On the flowchart select either "Full Payment Not Made by Due Date" or "Full Payment Made by Due Date" depending on the circumstances.
